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The Social Return on Investment (SROI) method.

How does it work? What are the benefits?
What is a social return?
A social return is a positive outcome of a project or policy for people
(individuals, communities, societies). These outcomes can be difficult to assess.
Why measure social returns in money?
There are many things we value that cannot be easily measured by money, but
these often need to be funded or paid for as well as compared to things that are
easy to measure in money. Therefore, alternative tools to measure social and
environmental outcomes have been developed and the social return on
investment (SROI) method is one of them (NEF, 2009, SROI Network, 2012). In
short SROI it is a systematic way to put a financial value on outcomes, which are
normally not measured in monetary terms. SROI can help to measure a broader
concept of value, taking into account social, economic and environmental factors.
An example
SROI puts a monetary value on the outcome of an activity. As an example a
SROI analysis for a community garden project at Gorgie City, Edinburgh,
Scotland, UK is given. It shows that the community garden project benefits a
wide range of stakeholders including volunteers, visitors, the NHS, the local
council and the environment (Gorgie City Farm, 2011). To explain the concept
in more detail we have created a short model calculation based on data from the
Gorgie City Farm (2011) report (see table next page). We assume £10k
investment and only present the SROI on health benefits for volunteers and NHS
funders.
A self-assessment questionnaire was used to measure the following project
outcomes for volunteers:
 Improvements in confidence and self-esteem
 Better mental health
 Eating more healthily
 More active

They also measured the following outcomes for the NHS:
 Reduced demand for mental health services
 Reduced and increased cost of prescribing
The SROI finds a financial proxy for the value (e.g. cost of a training course
based on documented sources) and then assumes the duration of the effect.
Expert assumptions are made to estimate the percentages (%) of Deadweight,
Displacement, Attribution and Drop-off. These four categories are defined as:
 ‘Deadweight’ (What would have happened anyway?)
 ‘Displacement’ (Outcome been created at expense of others?)
 ‘Attribution’ (How much of the outcome is due to external factor?)
 ‘Drop-off’ (percentage decrease of outcome with time)
Another assumption is the discount rate for multi-year effects. In the following
table we have used 3.5%. All assumptions can be tested in a sensitivity analysis
showing what-if SROI results for other percentages.
Benefits and Limitations
It can be concluded that the SROI delivers many benefits. Firstly it provides
‘hard figures’ (e.g. pounds) which most of us, and especially funders, are familiar
with. It forces projects to collect social and environmental data, engage
stakeholder and monitor outcomes. It gives a standardised framework on how
to evaluate outcome, and a decision support tool for the governance of projects
including planning and sensitivity analysis. For public health, monetary values can
more easily be compared with alternative interventions or prescriptions.
The main limitations are the cost and skills to perform the method, the
assumptions, which can be arbitrary, and the temptation that outcomes are
exclusively judged on money and over-interpreted. Also sometimes it is not
possible to accurately capture all invaluable outcomes and it might not be
appropriate to attach monetary values to everything.
References:
Gorgie City Farm (2011) Gorgie city farm community gardening project. Social return on investment
(SROI) report. Federation of City Farms and Community Gardens. Bristol, UK, www.farmgarden.org.uk
New Economics Foundation (2009) A Guide to social return on investment, Cabinet Office, London, UK
www.neweconomics.org/publications/entry/a-guide-to-social-return-on-investment
SROI Network (2012) A guide to Social Return on Investment. Written by Jeremy Nicholls, Eilis Lawlor,
Eva Neitzert and Tim Goodspeed, and edited by Sally Cupitt, SROI Network, Liverpool, UK, www.sroiuk.org
Growing Health (Sustain & Garden Organic) Dr Ulrich Schmutz 11/15/2013

Exemplified social return on investment (SROI) calculation (Source: Gorgie City Farm, 2011, calculation inputs simplified to demonstrate method)
Stakeholde
rs (who
experiences
change?)

Outcomes
(how will the
stakeholder
benefit) description

Indicator (how
will you measure
the Outcome?)

Volunteers Improvements No. of volunteers
in confidence reporting increase
and self
in self confidence
esteem

NHS

Quant Durat Financial proxy
ity
ion ( for Outcome
years
Outco
me
lasts)

10

'How to be more selfconfident'

Better mental
health

No. of volunteers
reporting fewer
visits to
doctor/counsellor

5

Eating more
healthily

No. of volunteers
who reported
eating more
healthily

15

More active

No. of additional
hours spent
walking

900

Reduction, in
hours, of visits by
volunteers to
doctors

300

Reduction, in
hours, of visits by
volunteers to
support workers

500

Reduced
demand for
mental health
services

Reduced cost No. of volunteers
of prescribing who have reduced
their medication
levels
Increased cost No. of volunteers
of prescribing who have
increased their
medication levels

1 Cost of training course

1 Cost of local counselling
for people on low
incomes (1hr/week for a
year, @£22/hour)

5 Money not spent on

Value Source
of the
financi
al
proxy

Deadw Displac Attributi Drop-off Year 1
eight
ement on (How (percentag

Year 2 Year 3 Year 4 Year 5

e decrease
much of
of outcome
the
outcome is with time)
due to
external
factor?)

(What
would
have
happene
d
anyway?)

(Outcome
been
created at
expense
of others?)

40%

0%

40%

0%

£4,302

£0

£0

£0

£0

40%

0%

40%

0%

£2,059

£0

£0

£0

£0

354 Family Spending Survey 2009

15%

0%

40%

50%

£2,708 £1,354 £1,354 £1,354

£1,354

2 http://www.transpentland.co.u

30%

0%

40%

50%

£756

£378

£378

£0

£0

50%

0%

40%

0%

£2,790

£0

£0

£0

£0

50%

0%

40%

0%

£5,250

£0

£0

£0

£0

50%

0%

40%

90%

£69

£7

£7

£7

£7

50%

0%

40%

0%

-£378

£0

£0

£0

£0

Total Impact

£17,556

£1,739

£1,739

£1,361

£1,361

Present value per year

£17,556

£1,678

£1,678

£1,313

£1,313

1195 nef's SROI for Coventry's
Local Enterprise and Growth
Initiative (unpublished)

1144 http://www.wellspringscotland.co.uk/

takeaways and snacks
(av. household
spend/year)

3 Cost per hour of joining
a guided walk

1 Cost of GP consultation

k/transpentland_walks.html

31 www.sroiproject.org.uk &
www.pssru.ac.uk 'Unit Costs
of Health and Social Care' )

1 Cost of a consultation
with a community nurse

10

5 Cost saved per person

35 www.sroiproject.org.uk
(originally from Scottish NHS
Cost Book 2008 )

23 Cost of low level dose (20mg)
of Fluoxetine (anti-depressant)
for one year from British
National Formulary
(www.bnf.org)

2

1 Increased cost per
person

-630 Cost of increase from 20mg to
60mg of Fluoxetine (antidepressant) for one year from
British National Formulary
(www.bnf.org)

Dicount rate

3.50%

Total present value £23,539
Investment £10,000
Social return on investment
2.35
Growing Health (Sustain & Garden Organic) Dr Ulrich Schmutz 11/15/2013